13 April 2016 Finance Committee meeting minutes

.au Domain Administration Limited

Finance & Audit Sub-Committee Meeting

13 April 2016, 11.00am

Via Teleconference

Present:  Graham McDonald (Chair), Jo Lim, Joe Manariti, Kartic Srinivasan, Miguel Wood, Stuart Benjamin, John Higgins (Moore Stephens), Jacki O'Sullivan (Minutes)

Apologies:  Grant Wiltshire

1.    Continuous Disclosure

  • There were no matters to be disclosed.

2.    Previous Minutes

  • The Committee noted the 10 February 2016 minutes which had been Committee and Board approved via email and published.

3.    Financial Statements

  • The March 2016 accounts were circulated via email for Committee review prior to the meeting and were summarised as follows:
    • Total cash and investments - $11.425m (includes cash, US$ Bank accounts, Term Deposits and Investments).
    • Net Assets $11.23m
    • Budget vs. YTD variances were summarised with no major issues highlighted.  The following was noted:
      • Annual & LSL figures are adjusted at end of year accounts so figures remain static until then.  
      • There was an unrealised market value of $39k on investments to 31 March 2016.
      • The CEO final payment was processed, details were summarised for the Committee.
      • J Higgins advised the Registry licence fee was yet to be billed.  It was agreed J Lim will review and confirm back to J Higgins.

4.    Draft 2016-17 Budget

  • J Higgins & J Lim summarised the draft 2016-17 budget and how projected figures had been calculated.  The Committee agreed the process for calculation of projected figures would be reviewed going forward.
  • K Srinivasan noted there would be a possible impact on the budget in the last quarter of the financial year pending a decision on Direct Registrations.
  • M Wood noted that as net growth figures were declining, the Board's policy on growth should be discussed.  It was highlighted auDA's role is to manage the .au domain space irrespective of domain name numbers, therefore no growth targets are required.  It was agreed this would be a discussion topic for the Board rather than the Finance Committee.
  • The Committee agreed to the following adjustments:
    • Increase Directors Travel & Expenses to $200k
    • Maintain Directors Fees at $202,560
  • The draft budget will now be held over for updating with the final May 2016 accounts.  It will then be forwarded to the Finance Committee for signoff at the June meeting and submission to the Board for approval at the June 2016 Board meeting.

5.    Expenditure above $50K

  • Nil

6.    Action Items Outstanding

  • Update on PPB Accounting Processes Review:  PPB had now received information from Moore Stephens & TWT and would be requesting further supporting information via Maddocks.  S Benjamin noted that PPB had advised that all required information requested to date had now been supplied.  The Chair suggested and the Committee agreed, PPB would also be asked for recommendations on best practice for future budget setting.
  • Discussion regarding Grant Wiltshire's suggestion to enhance the Committee's role with the introduction of a dashboard methodology aligning finance and organisational strategy and objectives was carried forward to the June 2016 meeting.
  • Review of ICANN fees paid by auDA:  It was noted that auDA's Contract with ICANN has no end date and that fees had been reviewed and decreased in the last few years.  The Committee agreed J Lim would review the contract again and report back to the Committee on possible further renegotiation of fees payable.

7.    Any other Business

  • The Committee was advised auDA was in the process of updated the banking and investment accounts signatories and a second Director was now required as a signatory on the auDA Investment accounts.  The Committee agreed Graham McDonald should be the second signatory and the required paperwork should now be completed.
  • The Committee asked, and was advised by the Acting CEO, that auDA's policy regarding accrual of annual leave was that staff could accrue up to approximately 8 weeks of annual leave, due to auDA  being a Not-for-Profit organisation and having a small number of employees.  The Acting CEO will review the current accrued leave balances and advise any relevant staff if excess amounts are required to be reduced.
  • The Committee noted there may be a Registry Contract Timing issue, J Lim will review and report back to the Committee.
  • The Acting CEO confirmed the additional 24 March 2016 Board meeting would attract additional Board sitting fees, and the accountants had been advised to process the additional payment with the April fee payments.  Board members will be advised to contact J Higgins if there are any issues regarding Superannuation payments.
  • The cost of supplying professional services over $50K p/annum to auDA, is to be reviewed from time to time as circumstances arise.

8.    Actions

  • JL – circulate March 2016 accounts to Board for the April meeting.
  • JL – review billing of Registry Licence fee and advise J Higgins when to bill.
  • JL/JH – update draft budget, circulate in June with updated May accounts for Committee signoff.
  • JL – request best practice recommendations for budget setting from PPB via Maddocks
  • JL – review staff accrued leave balances, advise any of excess to reduce.
  • JL – review Registry Contract timing issues – report back to Finance Committee.
  • JL – review ICANN Contract and fees.
  • JL – review professional services costs over $50k p/annum.
  • JOS – process GMcD as second investment account signatory.
  • JOS – advise relevant Board members to contact JH re; super issues re; March 2016 sitting fee.
  • JOS – c/f Grant Wiltshire's item for June Committee agenda.

9.    Next Meeting

  • Wednesday 15 June 2016 at 11.00am via teleconference.